£16bn of foreign cash makes London world's most expensive office market
More than £16bn ($26bn) in overseas money flooded into London's booming commercial property market in 2013, making it the capital's most successful year since the boom in 2007, according to Jones Lang LaSalle.
A number of major deals, including several 'trophy' assets, fuelled the growth, with More London and the St Botolphs building selling for £1.7bn ($2.8bn) and £460m (£757m) respectively. The former Canadian diplomatic base at One Grosvenor Square was also sold to an Indian developer for £306m ($503m).
Damian Corbett, head of central London office investment, said: “The final quarter has been very strong, and turnover has exceeded initial expectations after a subdued start to the year. In fact, London remains the most active global city, with deal volumes around 1½ times its nearest competitor New York, followed by Tokyo and Paris.
“We have seen continued interest from foreign buyers, particularly those from the Asia/Pacific region, and are also seeing new entrants to the market from all around the world.”
This comes at the same time as a CBRE report stating that London has unseated Hong Kong as the world's most expensive office market.
London’s West End’s overall occupancy costs of £158 ($259) per sq. ft. per year topped the “most expensive” list. Hong Kong-Central followed with total occupancy costs of £142 ($234). Beijing’s Finance Street, Beijing’s Central Business District (CBD) and Hong Kong’s West Kowloon rounded out the top five most expensive places to rent office space in the world.